LINTHICUM, MD -- in a move to heighten its presence in the metro optical networking arena, Ciena Corporation has ag...
February 19, 2002
LINTHICUM, MD — in a move to heighten its presence in the metro optical networking arena, Ciena Corporation has agreed to acquire ONI Systems for approximately US$900 million in stock.
Under the terms of the agreement, all outstanding shares of ONI common stock will be exchanged at the ratio of 0.7104 shares of Ciena common stock for each share of ONI common stock, which represents approximately 24 per cent ownership of the combined company.
The move will combine Ciena’s core optical networking and switching expertise with ONI’s metropolitan optical networking leadership.
“This is a different kind of combination for a different kind of market,” said Gary Smith, president and CEO of Ciena. Smith says that together the companies will combine their efforts, consolidate their resources, and target new market opportunities. As a result, he says the company expects “to accelerate Ciena’s return to profitability.”
Ciena expects the transaction to result in annual cost savings of US$55 to US$65 million for the combined company, and estimates it will have approximately US$1.3 billion of cash net of debt as of January 2002.
The transaction is expected to close during the second or third quarter of 2002. Upon closing, the combined company will retain the Ciena name and will be headquartered in Linthicum, MD.